Working Remotely From Japan for a Foreign Company: Legal & Tax Reality (2026)

Can you legally keep your US/EU job while living in Tokyo? Yes, but the visa, tax and employer side all matter. Full breakdown of 5 setups (PR, digital nomad, KK, sole proprietor, EOR) with real cost numbers.

Updated October 2026: since 16 October 2025, the Business Manager Visa needs ¥30 million in capital (not ¥5 million), a full-time employee and more, so Option D is rewritten. We also corrected two points: the 28-hours-a-week rule is for students and dependents, not work-visa holders, and a sole proprietor files the opening notice with the tax office, not city hall.

The dream and the reality

"Can I keep my US/EU/Singapore job and just work from Tokyo?" is one of the most-asked post-COVID immigration questions. Short answer: yes, but the legal and tax setup matters more than most people realize. Get it wrong and you face back taxes, employer trouble, or visa cancellation.

The legal question: can your foreign employer legally pay you while you live in Japan?

It depends on three things: (1) your visa status, (2) where the company is registered, (3) how they pay you.

Option A: You have a spouse visa or PR

No work restrictions. You can be employed by anyone, anywhere, in any structure. Simple.

Option B: You're on a work visa sponsored by a Japanese company

Your status covers the kind of work you were admitted for. Paid side work for a foreign company that falls outside your status needs Immigration's permission (資格外活動許可, shikakugai katsudo kyoka) before you start, on top of your employer's OK for "side work" (副業). The 28-hours-a-week rule people quote is the blanket permission given to students and dependents, not a rule for work visas. Doing it without permission is a status violation, and it's not worth risking your renewal.

Option C: You're on a digital nomad visa (新設, 2024)

Japan launched a 6-month digital nomad visa in 2024 for citizens of specific countries (US, UK, EU, AU, etc.) earning ¥10M+/year. You can work remotely for a foreign employer legally. Non-renewable after 6 months — designed for trial residency, not permanent.

Option D: You set up your own Japanese company

Business Manager Visa (経営・管理, keiei kanri). You incorporate a Japanese KK or GK, become its director, and your "foreign clients" pay your Japanese company. Then you pay yourself a salary in Japan. Since 16 October 2025, though, the bar is high: ¥30 million in capital, at least one full-time employee (Japanese or with a residence-based status), Japanese at B2 level (you or a full-time employee), 3+ years of management experience or a relevant master's/PhD, a business plan checked by a Japanese CPA, tax accountant or SME consultant, and an office that isn't your home. ISA also won't count it if you outsource most of the work. For a solo remote worker, that's rarely realistic anymore. Setup costs include registration tax of 0.7% of capital for a KK (¥210,000 on ¥30 million). Details in our Business Manager Visa guide.

Option E: You become a sole proprietor (個人事業主, kojin jigyonushi)

Most common path for established freelancers. You file an opening notice (開業届, kaigyo todoke) with your tax office, invoice your foreign clients in their currency, deposit to a JP bank, and file 確定申告 (kakutei shinkoku) yearly. No visa friction if you're on spouse/PR. On a work visa, the same question as Option B applies: if the work is outside your status, get permission first.

The tax question: where do you owe?

If you're a tax resident in Japan (= 1+ year of intended residence OR domicile here), Japan taxes your worldwide income. This means: even if your US employer pays you in USD to a US bank, Japan expects you to declare it on Japanese taxes.

Practical consequences:

You file 確定申告 between Feb 16 and Mar 15 each year for the prior year
You owe Japanese income tax (5-45%) + residence tax (10%) on the full foreign income
You may also owe pension + national health insurance (~30% combined for sole proprietors)
If your foreign country also taxes (e.g., USA citizens), you use tax treaties + foreign tax credits to avoid double-tax. Most countries do not double-tax Japan-resident expats; the US does (FEIE excludes first ~$120k but you still file).

The employer's problem you might not see

Your US/EU employer may have legal liability in Japan if you're working from here. Specifically:

Permanent Establishment (PE) risk: if you're a senior decision-maker negotiating contracts from Japan, your employer might be deemed to have a "permanent establishment" here, triggering Japanese corporate tax obligations. Most companies forbid this.
Employment law: Japan extends labor protections (overtime, severance, notice periods) to people working from Japan, even if their contract is foreign. Some employers won't take this risk.
Payroll: a Japanese tax resident on a foreign payroll creates compliance issues. Many employers force you onto an EOR (Employer of Record) service like Deel, Remote, or Skuad.

Many "remote worker" arrangements get rejected at the legal review stage. Have the conversation explicitly with your employer before assuming it's OK.

The EOR (Employer of Record) shortcut

The cleanest setup for many: your foreign employer doesn't hire you directly. They contract with an EOR (Deel, Remote, Skuad, Globalization Partners) that has a Japanese subsidiary. The EOR hires you locally, runs Japanese payroll, withholds Japanese taxes and social insurance, and bills your "real" employer.

Trade-offs:

+ Clean tax + visa situation (work visa sponsored by the EOR's Japanese entity)
+ Full Japanese benefits (pension, health insurance) + social security counting toward PR
- EOR adds 8-15% to employment cost (your employer pays)
- Your equity / stock options need separate arrangement (often via your "real" employer's plan)

The pragmatic decision tree

Already have spouse/PR? → Sole proprietor or set up KK. Easiest.
US/EU/AU citizen earning ¥10M+, planning 3-6 month stays? → Digital nomad visa.
Want to stay long-term, your employer won't support EOR? → Your own KK on a Business Manager Visa, only if you can meet the October 2025 criteria (¥30M capital, a full-time employee, Japanese B2...).
Want to stay long-term, employer flexible? → Push them to use an EOR like Deel.
Want to stay long-term, no flexibility from employer? → Find a Japanese employer instead. Use our HSP calculator to see if you can qualify for fast-track PR.

What it costs in practice

Use our take-home calculator to model the Japan side. A US ¥15M-equivalent salary (~$100k) paid through EOR in Tokyo nets roughly ¥10.5-11M after all deductions — very similar to a direct Japanese employment offer at the same gross. Sole proprietor structure can be slightly more efficient (~¥11.5-12M) if you have legitimate business expenses, but you lose health/pension benefits compared to EOR.